Sales volume is the total dollar value of the homes and other real estate contracts that a real estate brokerage or agent support. For example, on a single home sales transaction, the sales volume would be the final value that he home sold for. It’s important to note that the total sales volume is greater than the total value of homes sold. This is because a brokerage or agent representing the buyer can claim the full home sales value for its sales volume. But the brokerage or agent representing the seller will also claim this amount. Sales volume helps assess the total potential earnings for a brokerage or agent. Brokerage and agent rankings often showcase top performers ranked by sales volume.
Sales volume shows the total value of the deals that an agent or brokerage have been involved in. Sales volume is a good indicator of the potential revenue a brokerage or agent can generate. But this number is regardless of how many transactions occurred. An agent who generates substantial sales volume most likely earns more than an agent with lower sales volume. But this assumes that their commission rates are fairly similar.
Sales volume indicates how much an agent or brokerage can earn. This can help determine how much market share a brokerage or agent has as a percentage of the total available volume. Sales volume when multiplied by the average commission rate determines the gross commission income generated by an agent or brokerage.
Sales volume may not show how consolidated an agent or brokerage’s business is. A brokerage handling a few $50 million dollar transactions may have the same volume as brokerage completing hundreds of $350,000 sales. Sales volume may not be a great representation for the earnings of a brokerage if that brokerage offers discounted commissions. For example, a brokerage that charges a flat $5,000 fee per listing doesn’t earn any more on a $50 million home than it does on a $500,000 home. But it would book 100 times the sales volume on the $50M home.